July 19 (Bloomberg) -- Michimasa Fujino began working on Honda Motor Co.’s aviation project 27 years ago at a hangar in Mississippi. Next year, Fujino, now president of the aircraft unit, says the project may finally get off the ground.
If so, Tokyo-based Honda would become the first newcomer to get U.S. approval in the $21 billion business-jet market since 2006. That would pit the carmaker against market leaders Textron Inc.’s Cessna and Brazil’s Embraer SA, who have fended off threats from companies such as Bill Gates-backed Eclipse Aviation, which sought bankruptcy protection five years ago.
Though delivery of the HondaJet hasn’t started, Fujino said he has clinched two to three years of orders for the $4.5 million plane and signaled the business will turn profitable before the end of the decade. The seven-seater plane, which Fujino calls a “flying sports car” or “flying Acura,” will be 15 percent more fuel efficient, have roomier cabin space and fly 10 percent faster than comparable aircraft, he said.
“There are no newcomers to business aviation, only cautionary tales,” said George Tsopeis, vice president at Montreal-based Zenith Jet, an aviation advisory firm. “If Honda manages to bring the HondaJet to market, that alone will be an accomplishment.”
Wearing aviator-style prescription glasses, Fujino said he expects the unconventionally designed jet -- the engines are on top of the wings -- to get clearance from the U.S. Federal Aviation Administration by next year.
He has said that before. Honda has delayed the debut of the plane every year since targeting deliveries in 2010 for reasons ranging from difficulties procuring components to parts damage caused by ice. The company says it’s getting closer, in May announcing that its fifth FAA-conforming HondaJet successfully completed its first flight.
To get permission from the FAA, a manufacturer must demonstrate that the plane meets U.S. regulations on everything from the strength of the wings to how it lands in a crosswind. Most of the process is conducted behind closed doors because the test data and designs supplied by aircraft manufacturers are considered proprietary and confidential.
Certification is a “long and arduous process” that typically involves testing four to five aircraft for 2,000 flight hours, Tsopeis said. Once a company gets the nod from the FAA, it becomes easier to win certification from other aviation jurisdictions, he said.
The FAA doesn’t comment on pending aircraft certification, it said in an e-mailed statement. Representatives at Cessna and Embraer didn’t respond to e-mails seeking comment.
The start of deliveries would fulfill the wishes of the company’s late founder, Soichiro Honda, who died in 1991. Though the carmaker doesn’t expect the business to be a big profit contributor, it has pursued the project partly as a tribute to the founder, Chairman Fumihiko Ike said in an interview this month.
In the fiscal year ended March, automobiles and motorcycles accounted for 92 percent of Honda’s revenue and 73 percent of operating profit.
For Fujino, the jet’s debut would come more than three decades after the company assigned him, then 26, to be the fifth member of a team dedicated to figuring out how to make planes -- a task he recalls seeming like such a dead end that he initially turned it down.
“I joined Honda to make cars,” he said. “But it’s a company order so regardless of what I wanted, I was moved to the plane department. So I figured I would do the best I could.”
Fujino said he was then dispatched to Mississippi State University, where he expected to advance the academic knowledge he had through a University of Tokyo aeronautical engineering degree. Instead, he soon found himself sanding a piece of molded fiberglass, said Fujino, who had never physically worked on a plane before coming to America.
“I was told I was going to learn state-of-the-art technology,” Fujino, 52, said in an interview. “What I ended up doing was sanding a piece of mold. That was a huge gap, but now I think the experience of making parts myself was good.”
Things did eventually get more advanced as Fujino developed ideas challenging conventional wisdom in aerodynamics.
“It’s common sense in the industry never to put anything on top of the wings,” he said. “But we found it was possible.”
The idea was to place the engines in the “sweet spot” above the wings that would be aerodynamically superior, he said. The finding was so bizarre that a friend at NASA advised him to drop it or risk ruining his career, he said. Fujino said he hesitated for half a year.
In 1996, in the midst of Japan’s first “lost decade,” 35-year-old Fujino had to plead to Honda’s board through several presentations not to scrap the unprofitable project. He got the go-ahead and the HondaJet unit was formally established in 1997.
Still, Honda has yet to win regulatory approval in U.S., the biggest business-jet market, Zenith Jet’s Tsopeis said.
“I believe that they seriously underestimated the certification challenges in bringing an aircraft program to market,” Tsopeis said.
Honda is planning to jump into an industry still recovering from the global financial crisis. In April, Textron cut its profit forecast on falling demand for Cessna light jets. A month later, Ernest Edwards, president of Embraer’s business-jet unit, said confidence hasn’t returned yet, though he’s seeing signs of a rebound.
New entrants have found it tougher to hang on. Eclipse Aviation, the closely held company whose shareholders included Microsoft Corp. co-founder Bill Gates and former Ford Motor Co. Chairman Harold A. Poling, filed for bankruptcy protection in 2008 as demand dried up.
Fujino says the backing of Honda, Japan’s third-largest carmaker, gives him an edge because automakers have more experience in customer service and automation in manufacturing than incumbent jet makers.
The company stands out for its persistence in sticking to the project, said Jon Kutler, who has followed the Honda project since the mid-’80s.
“Honda has tenaciously kept this program alive to the point where certification is now within reach,” said Kutler, founder of Admiralty Partners, a boutique aerospace investment banking firm. “It has been a long and expensive journey that I do not expect to be repeated by other new entrants.”
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